Opportunity cost
What Opportunity cost means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Opportunity cost
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Reference: Pearson Edexcel
The benefit of spending money elsewhere that a consumer weighs against the marginal utility of an additional unit.
Profit compensates the entrepreneur for the opportunity cost of their time and capital.
The value of the next best alternative forgone when making a choice.
The value of the next best alternative foregone.
Topics that use Opportunity cost
- Demand (Pearson Edexcel A-Level)
- Entrepreneurial motives (Pearson Edexcel A-Level)
- International trade (Pearson Edexcel A-Level)
- Productive and allocative efficiency (Pearson Edexcel A-Level)
Related terms
- Allocative efficiency
- Comparative advantage
- Complementary goods
- Consumer preferences
- Ethical stance
- Financial incentives
- Independence
- Labour productivity
Using Opportunity cost in the exam
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